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| RBS's sale of Asian biz hit hurdles: WSJ |
| Press Trust of India / New York Aug 25, 2009, 20:49 IST |
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The Royal Bank of Scotland's (RBS) effort to complete the sale of its Asian business, including in India and China, is facing some hurdles and could fetch a smaller than expected price, says a media report.
Attributing to people familiar with the matter, The Wall Street Journal said RBS's effort to complete the sale of its Asian assets has hit some snags and could mean lesser price than the UK-controlled bank has expected.
Quoting people close to the matter, the report said, "The problems involve talks with UK bank Standard Chartered Plc over commercial and retail businesses in China and India."
According to people close to the matter, the daily noted, "both parties still hope to reach an agreement. RBS had hoped to wrap up the talks by mid-summer."
The China and India assets are valued in the "low hundreds of millions" of pounds, the report said attributing to people familiar with the deal.
This means RBS could fall short of selling all the Asian assets at their initial valuation of 1 billion pounds to 1.5 billion pounds.
The report said discussions for the Indian businesses have encountered some road blocks because of the difficulties surrounding licensing agreements in that country, as well as Standard Chartered's concern about some risky, unsecured loan portfolios it could inherit.
Besides, citing one person close to the talks, the Wall Street Journal said Standard Chartered had some concerns about what would be included in the China businesses.
Chinese banking regulators also may be putting the brakes on the deal as a result of Standard Chartered's role in a controversy that erupted in Hong Kong involving the sale of "minibonds" by banks, the daily said citing one of the people.
The assets under discussion are part of a group of RBS's Asian businesses that were earmarked for disposal under the strategic plan of Chief Executive Stephen Hester, who is in the process of shrinking the troubled bank's balance sheet, the daily noted.
Many of the Asian businesses were acquired by RBS when it bought part of Dutch bank ABN Amro Holding NV in 2007 — a top- of-the-market deal that helped drive RBS to the brink of insolvency.
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